Leading Article: A wrong way to bump up the licence fee

IF THERE is a case for a higher licence fee to sustain public service broadcasting, the BBC should make it openly, and not try to slip it through under the guise of an extra levy for digital television.

You do not need to know anything about the imminent digital revolution to understand the row which has broken out in advance of the report on the BBC's future to be published on Thursday by the economist Gavyn Davies, a columnist on this newspaper. Mr Davies is expected to propose what is in effect a new, higher licence fee for people who buy digital technology, giving them access to lots of channels through their aerials, mostly subscription but including the five existing free networks. Just as the more expensive colour licence in 1968 funded a huge expansion of the BBC as the new technology became standard, so the BBC hopes a pounds 19 digital supplement will see a rise in its pounds 2bn-a-year revenue which has been capped in line with prices in recent years.

And the BBC has a good case for more money. Most of its costs are staff costs, and so rise in line with earnings rather than prices, which means an inflation-linked licence fee represents a permanent squeeze. But some of its arguments are more suspect. Why should the BBC need more channels to compete in the digital age? The issue is surely not so much quantity as quality.

And there are two other questions which must be answered. The first is whether any of the BBC's output should carry advertising in the digital age. There is a cleanness and integrity about BBC Online, the corporation's excellent advert-free Internet site (which is, incidentally, paid for by licence-payers, most of whom cannot see it). Meanwhile some of the Government's own websites do carry adverts, with disclaimers. As digital television and the Internet converge, this issue must be resolved. The other question is the future of BBC Worldwide (which used to be called the World Service, yet another pointless name-change), which deserves greater investment by the taxpayer rather than the licence-fee payer. But, as the technologies of TV and computers converge, the BBC's reputation will rest on its ambition to be a trusted, independent source of news. That means deciding on the split between domestic consumers, who pay a licence fee, and Britain's taxpayers, who are investing in national prestige.

The Government should not choose the easy route of simply submitting to BBC lobbying. Peter Mandelson, the BBC's former adviser, last week said it "needed" extra money to prevent its quality deteriorating, and that a digital licence fee was the fairest way. Public service broadcasting must command public support. The only way to do that is to make the argument for funding it open and honest. Trying to slip a licence-fee increase through the back door is the wrong way to do it.